TORONTO (miningweekly.com) – South Africa-focused project developer Diamcor Mining has announced that strategic partner Tiffany & Co Canada has agreed to payment deferrals and a maturity date extension of its loan and convertible debenture financings with the company for six months.
According to the company’s latest available management discussion and analysis, Diamcor had long-term debt of $4.41-million owing to Tiffany, as at October 30.
Diamcor said the arrangement was subject to finalising and executing amended documentation, whereby interest would continue to accrue on the outstanding balances of the financing facilities during this period, with payments of both principal and interest to start again on July 20.
Tiffany & Co had in February last year also agreed to a one-year deferral and loan extensions, effective December 1, 2014, of all accruing principal and interest payments pursuant to the terms of its loan and convertible debenture financings with the company.
Shortly after acquiring the Krone-Endora at Venetia project, in South Africa's Limpopo province in 2011, Diamcor established a long-term strategic alliance and first right of refusal with Tiffany & Co Canada to buy up to 100% of the future production of rough diamonds from the project, at prices to be determined by the parties on an ongoing basis.
The company had not yet declared commercial production at Krone-Endora at Venetia, located directly next to De Beers’ Venetia diamond mine in the Limpopo province – the country’s largest precious gems mine – and recoveries were incidental to the ongoing commissioning and testing exercises performed at the project.
However, an 18% decline in diamond prices in 2015 – owing to lower growth in Chinese jewellery demand and reduced availability of bank credit for cutters and polishers that led to lower rough demand and overstocking – was dulling its appeal.